What is the main argument against the belief that international trade is the main cause of the increasing income inequality in the United States?
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What is the main argument against the belief that international trade is the main cause of the increasing income inequality in the United States?
The model of factor proportions predicts that international trade affects income distribution through a change in relative prices of goods. Studies on international price data have found clear evidence of a change in relative prices of goods. The convergence of factor prices is predicted by the factor proportions model. The share of international trade in total spending in advanced nations is very small. The transformation of trade in Mexico in the late 1980s was accompanied by an increase in the wages of skilled workers and a general increase in wage inequality. a) I and II are correct. b) II, III, and IV are correct. c) III, IV, and V are correct. d) I, II, and V are correct. e) II, IV, and V are correct.
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